A new city in India is attracting global investors, turning a rural area into an urban smart city. Read how some of the area’s farming families and field labourers are benefitting from this transformation.
Every country, province, and state needs a capital. A place where political decisions are made, hopefully for the good of the people. Other cities might have the money, the intelligence, and the culture, but even if it does not have any of those things, the capital always has the power.
In southeastern India, farms are becoming the country’s newest state capital, called Amaravati. Named after a historic Buddhist site from 400 BC to 1100 AD, Amaravati hopes to be one of India’s leading smart cities. Within a 380-kilometre radius of Amaravati are the cities of Chennai, Hyderabad, Jagdalpur, and Visakhapatham. What was before a rural landscape of farms with a singular purpose, is becoming the political power base, financial hub, academic cluster, and cultural heart for a whole state.
Why does Amaravati exist?
Back in February of 2014, the Government of India, led by the United Progressive Alliance, bifurcated the State of Andhra Pradesh into the State of Telangana and the residual of Andhra Pradesh. This was done because the area of the state around Hyderabad has advocated for their own state for years. Most of the governmental, commercial and financial assets of Andhra Pradesh are in or close to Hyderabad. When the bifurcation happened, Andhra Pradesh became cut off from its main city, even though Hyderabad would be technically its capital for no more than 10 years. In response, when the newly-elected Indian People’s Party formed a government in May of 2014, they sought to create a new capital for the residual of Andhra Pradesh.
The entity leading this monumental project, the Andhra Pradesh Capital Region Development Authority (APCRDA), estimates that it will cost 4.32 billion GBP, paid for by global investors and the issuance of high-interest rate Amaravati Bonds. According to the master plan, all the civic facilities, many designed by Foster+Partners, will be scattered throughout nine theme cities within the city. There will be a city each for Knowledge, Education, Justice, Finance, Media, Electronics, Tourism, Sports, and Government. Parks and lakes will make up 30% of the city, which will be extensions of existing canals and rivers, to keep native species in the city. Walking trails and over 3,000 kilometres of bike paths will provide an enjoyable city experience for the new urban dwellers. Streets will be divided so that pedestrians, cyclists, motorcyclists, and motorists can all share the road in safety. Embedded in the city will be technology to operate, monitor, and maintain the new, 218 square-kilometre capital. By 2050, Amaravati’s population is projected to be 3.55 million.
When the project was announced in August of 2014, at that time no location nor name had been chosen. It was not until the following month that a location for the capital was selected on the southern bank of the Krishna River. By the end of 2014, a Land Pooling System (LPS) was put in place after much consultation in the rural villages that would be impacted, where farmers could donate their lands for this new capital. It is the largest ever land pooling exercise of its kind in India.
What do the farmers get in return for their donation?
By consenting to transfer ownership of their moveable and immoveable property for the new capital, the APCRDA will transfer a portion of the land back to the original owners, plus train them in real estate and construction management. The farmers give their larger assets of a lesser value to the government, which then returns a smaller asset of a higher value back. They are also given the knowledge to profit off of their new developed asset after the city is built, equipped with smart city technologies. The economic opportunity for the locals from land pooling is why Amaravati was a finalist for the NewCities Wellbeing City Award 2019.
Farmers are told what area of land and location they will receive in return and can follow the development of their future plot in real-time. They receive annuity payments of between 30,000 to 50,000 INR per acre per month (about 348 to 580 GBP per acre per month) based on the size of their original land for ten years to return them to the same financial position they were at pre-transfer. They also get their farming loans waived, but only up to 150,000 INR (+/- 1,740 GBP). The land returned could be part of the original property, or close to the original property. As of February of 2019, the number of landowners who registered for the LPS was just over 30,000 and more than 20,000 have had their agricultural loans waived. About 95% of the areas zoned residential throughout Amaravati are owned by farmers who registered for the LPS.
What happens to farmers who decide not to opt into the LPS is not clear, and some want no part of it, but the numbers of farmers willing to participate exceeds those who are reluctant. In March of 2015, the first 33,000 acres of land was pooled from 25,000 farmers in just 60 days. Even with a few farmers not willing to transfer or sell their property, 90% of the land for Amaravati has already been secured through the LPS. The short-term loss, but long-term gain is a trade that most farmers are happy to make.
In some case, farmers who do not want to manage the developed land that will be returned to them can request that they receive monetary compensation, and the APCRDA have arranged that all participating landowners will be exempt from capital gains tax. In 2017, the APCRDA even took hundreds of farmers on a trip to Singapore to learn how the transition from sparsely populated swamp-land to densely populated urban city was handled.
Even tenant farmers and labourers who do not own land, are given a pension of 2,500 INR per month for ten years (+/- 29.01 GBP per month) through a capital region social security fund. It is not much, but the compensation is proportional to their standard of living. The ten-year period gives farmers and labourers time to learn new skills, which is provided for free by the state, along with health care. Over 21,000 families have started receiving these ten-year pensions, and over 2,000 have benefitted from the free skill development programs which come with a stipend, learning plumbing, mechanics, painting, and other trades. Almost as many people have received free medical care through screening camps in villages where they receive health cards. These poorer families are also given access to interest free loans to start new businesses of up to 25 lakhs (29,000 GBP). Amaravati will also build housing for seniors and the homeless. More than 5,000 units in eight locations across the city are being built for the homeless, which will provide housing for about half of the area’s homeless. To receive these benefits, poorer families and the homeless have to demonstrate that they were living in the area since December 8th of 2014, to prevent people from neighbouring states from moving to Amaravati and taking advantage of the city’s social development. Nevertheless, the APCRDA recognize that the success of Amaravati will not happen if the wellbeing of the most vulnerable members of the area are neglected.
A healthy city cannot exist with access to clean water, which is why Amaravati plans to treat 100% of its rainwater for drinking, irrigation and cooling. This is significant considering since the National Institution for Transforming India, the country’s planning organisation, released a report that warned that 40% of India will not have access to drinking water by 2030. Chennai, one of the cities close to Amaravati, is already experiencing the consequences of a lack of water. One of the reasons that the location for Amaravati was chosen was because it is in a floodplain and in an area that gets a lot of rain. By turning a disadvantage into an advantage, Amaravati will collect, treat, and reuse the excess water for drinking, urban parks, and green roofs.
Few believe that Amaravati will be built without trouble. There have been claims by the current state government of Andhra Pradesh that the previous government covered serious issues related to the LPS. Delays in construction have occurred as investors wait for the new state government to determine its plan for Amaravati. Then there is the reality of building a fully developed city within a couple of decades, which will come with setbacks, challenges, and political influence. When widespread change happens in an area, not everyone will be happy, tensions can rise, and long-standing issues can come to the fore. This is true in India as it is in any country.
No matter what the final city ends up looking like, Amaravati hopes to offer a higher standard of living for the people of Andhra Pradesh, and a capital that everyone in the state can be proud of.
Words Phil Roberts